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The major averages finished the week mixed with tech and small caps staging impressive gains. Their large cap brethren, however, struggled for momentum amid a series of economic reports which suggested that, at the least, our economy had hit a "soft patch" very much akin to the pattern of the past five years. And the release of the January FOMC minutes on Wednesday afternoon provided yet one more worry for market participants as the first discussion on the possibility of raising short term rates sent chills through the market. Nevertheless, when all was said and done, the market took the weak economic reports with a grain of salt; attributing much of the weakness to the weather. And while I do believe people don't shop for cars and homes in snow drifts and 30 degree below zero temperatures, the weakness cannot be all attributed to the weather. As an example, the January Housing Starts report on Tuesday was dismal with new housing starts down 26% but housing permits in the west were down a whopping 23%. Zerohedge quipped, "that's where the snow must have been the strongest". The market is obviously coming down on the side of the multitude of economists who are saying that the recent spate of data is an anomaly and that we will start to see a strong recovery coming into mid-year. I'm ambivalent as to the direction of the economy so I'll take my cues from the markets. It's pretty clear that stocks still want to go higher despite all the volatility but there is just no catalyst to push them to new all-time highs. Small caps had an impressive week gaining 1.34%. Here's a daily chart of the Russell 2000: Please go here to read the entire commentary: http://equitymaven.blogspot.com/2014/02/the-fed-spooks-market.html

Week-In-Review: Fed Spooks Markets; Dow & S&P 500 Negate ...

Fed in focus after weak jobs report spooks markets - CNBC

Grohowski said the poor jobs report, the weakest since December 2013, signals the Fed is likely to take its time raising rates. After the Fed's ...Read more

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